I blogged earlier this year that the SEC is getting stricter about whistleblower awards. The folks at “Whistleblower Network News” have now tallied the dollar amounts from the orders posted by the SEC – this article discusses what they found:
Aside from 122 denials and six orders omitting award amounts, award orders for fiscal year (FY) 2025 total $59.7 million. This figure averages to around $2 million per award.
The 2025 report stands in stark contrast to (FY) 2024 and (FY) 2023, which had totals of $255 million and $600 million, respectively. The SEC’s whistleblower program has not seen such a low level of awards since 2017 under the Obama administration.
Of course, the SEC hasn’t been able to post orders recently in light of the government shutdown. But the Operations Plan says they’re still accepting tips:
The Division of Enforcement will have only a limited number of staff on duty to perform excepted functions. However, staff will attempt to respond to certain critical matters, including allegations of ongoing fraud and misconduct. The Tips, Complaints, and Referrals website will continue to be operational, and submissions will be reviewed for appropriate action.
So, even though the focus and magnitude of awards might be changing right now, the program is still in effect.
In late October, Glass Lewis announced the results from its annual policy survey. You might be wondering, “does this still matter, since Glass Lewis is moving away from its house policy?” The answer is “yes,” for a few reasons:
1. That move isn’t happening until 2027.
2. Even after the “house policy” disappears, Glass Lewis is still going to provide research and perspectives to clients – it’s just that everything will be more customized, which is already happening at a certain level. Glass Lewis says results from the policy survey inform its case-by-case analysis of company circumstances in the research and filters that it provides to its global client base.
3. The policy gives insight into investors’ current views on several hot topics – including reincorporation, board and workforce diversity, bylaws restricting shareholder proposals and derivative suits, disclosure of executives’ personal security costs and other executive compensation info, response to “anti-ESG” sentiment, and more.
Here are a few key takeaways:
– 85 percent of investors and 76 percent of non-investors say they do not base governance votes solely on financial performance.
– With Texas and Nevada amending their laws to attract more companies, 50 percent of investors are focusing more on shareholder rights when assessing reincorporation.
– 44 percent of U.S. investors view the CEO-to-median-employee pay ratio as “not important”, compared to just 8 percent of non-U.S. investors.
– U.S. based investors are far more likely to ignore diversity factors in their evaluation of boards (42%) compared to investors from other regions (6%).
When it comes to providing research & recommendations that take into account non-financial factors, that’s a pretty important question (and response) for the proxy advisors. John blogged recently that Texas AG Ken Paxton announced an investigation of ISS & Glass Lewis – another shot across the bow after a court temporarily blockedSB 2337 while challenges to that bill proceed to trial early next year.
On that note, here’s more color on how investors and non-investors are evaluating reincorporation, based on survey responses:
Over the past year, many U.S. states have amended their corporate laws to attract or retain companies. Changes include establishing specialized business courts, providing increased protection for directors, officers, and controlling shareholders, reducing litigation risk, and providing greater clarity on the standards for director independence and/or disinterestedness.
In response to this shifting landscape, half of investors reported that they are putting more emphasis on shareholder rights and protections (compared to just one-third of non-investors. Conversely, compared to investors, non-investors were over twice as likely to have become more favorable to company-friendly laws and statutes, litigation risk, and protecting directors, officers and controlling shareholders.
Glass Lewis typically publishes its policy updates in November or December. Stay tuned!
Delistings have been top of mind for some folks lately, especially in light of steps that Nasdaq has been taking to accelerate the process for some types of non-compliance. Specifically:
– Meredith recently flagged a couple of Nasdaq proposals that – if approved – will accelerate delistings for stocks trading at low prices and for companies with low public float.
– Nasdaq amended its rules earlier this year to accelerate delistings for companies failing to meet the minimum bid price requirement.
So, a recent Deep Quarry newsletter caught my eye, where Olga Usvyatsky summarizes the most common reasons for delisting notices that are being reported on Form 8-K. Here’s what she found:
1. Listing Standards – Price, Market Value & Financial Condition. Non-compliance with quantitative listing standards, such as minimum bid price, market value, equity, or net income, comprises about 56% of the cases.
2. Late SEC Reports/Filing Deficiencies. Non-compliance with timely disclosure requirements, including a failure to file annual or quarterly reports, comprises about 21% of the cases.
3. Other – mostly M&A related withdrawals. Voluntary withdrawal requests, typically amid an M&A transaction, comprise about 16% of the cases. Note that this category refers to a voluntary withdrawal request amid a strategic decision and is not an acknowledgement of a deficiency.
4. Public-interest or SPAC-related concerns comprise about 5.1% of the cases, with common reasons including concerns about a company being a “public shell”, concerns about issuance of securities that cause a substantial dilution, Chapter 11 petitions, and SPAC-specific issues related to inability to complete an acquisition within a prescribed timeframe.
5. Governance and shareholder rights lapses category comprises about 4.5% of the cases, comprised primarily of failures to hold annual meetings (1.8% of the cases), deficient board compositions (1.4% of the cases), and failures to adopt compensation clawback policies (0.6% of the cases).
If you’re working with a company that’s received a delisting notice or is heading in that direction, I shared a template compliance plan last year that may help you chart a path out of the wilderness.
1. Julie’s journey to becoming the CEO of Karrikins Group, and why she decided to get her PhD in Organizational Communication.
2. Why the “how” of leadership matters.
3. Key conversations that help boards and executives navigate decisions, including the importance of naming short-term and long-term tradeoffs.
4. How building alignment at the board level impacts corporate culture and success.
5. How Julie’s experience as an Ironman triathlete affects her perspective.
6. Julie’s advice for the next generation of women governance trailblazers.
To listen to any of our prior episodes of Women Governance Trailblazers, visit the podcast page on TheCorporateCounsel.net or use your favorite podcast app. If there are governance trailblazers whose career paths and perspectives you’d like to hear more about, Courtney and I always appreciate recommendations! Drop me an email at liz@thecorporatecounsel.net.
Yesterday, ISS announced the launch of its comment period on proposed changes (shown in redlines) to its benchmark voting policies. During this open comment period, ISS gathers views from stakeholders (investors, companies, and other market participants) on its proposed voting policy changes for the next proxy season.
For 2026, comments are being sought on 19 proposed policy changes. Here is a summary of the changes applicable to the U.S. market from the press release:
Capital structures – unequal voting rights: Capital structures with unequal voting rights to be considered problematic regardless of whether shares with superior voting rights are classified as “common” or “preferred.”
Non-employee director (NED) compensation practices – problematic high NED pay: Expands existing policy addressing problematic high NED pay practices, allowing for adverse vote recommendations in the first year of occurrence or when a pattern emerges across non-consecutive years.
Executive compensation – company responsiveness: In light of recent SEC guidance on Schedule 13G (passive) versus Schedule 13D (active) filing status for institutional investors, which may create legal uncertainties when companies seek to obtain feedback from shareholders, this proposed policy change allows more flexibility for companies to demonstrate responsiveness to low say-on-pay support.
Executive compensation – long-term alignment in pay-for-performance evaluation: Updates U.S. pay-for-performance quantitative screens to assess pay-for-performance alignment over a longer-term time horizon, considering a five-year period, compared to the current three years, while maintaining an assessment of pay quantum over the short term.
Executive compensation – time-based equity awards with long-term time horizon: This proposed policy update reflects the importance of a longer-term time horizon for time-based equity awards and represents a more flexible approach in evaluating equity pay mix in the pay-for-performance qualitative review.
Executive compensation – enhancements to equity plan scorecard: Adds a new scored factor under the Plan Features pillar to assess whether plans that include non-employee directors disclose cash-denominated award limits and introduces a new negative overriding factor for equity plans found to be lacking sufficient positive features under the Plan Features pillar.
U.S. Environmental and Social-related (E&S) shareholder proposals: Updates U.S. policy on four E&S-related shareholder proposal topics to reflect fully case-by-case assessments of each situation.
Global – shareholder proposals: Updates to all market and regional policies globally to reinforce a consistent case-by-case approach, and to provide a baseline for shareholder proposal topics not explicitly covered in some market and regional policies.
The announcement notes that no changes are being proposed to director overboarding policy parameters for 2026.
The comment period opened yesterday and will run through 5 p.m. ET on November 11.
Comments received will be considered as ISS Governance finalizes the changes for its 2026 Benchmark voting policies, which will be announced in late November, and will generally be applicable for shareholder meetings taking place on or after 1 February, 2026.
The latest issue of The Corporate Executive newsletter has been sent to the printer. It is also available online to members of TheCorporateCounsel.net who subscribe to the electronic format. In this issue, we take a deeper dive into the topics covered at the SEC’s Executive Compensation Roundtable, as well as the many issues that commenters have been raising for the SEC’s consideration in its retrospective review of executive compensation disclosure requirements.
If you are not already receiving the important updates we provide in The Corporate Executive newsletter, please email info@ccrcorp.com or call 1.800.737.1271 to subscribe to this essential resource.
I love Halloween! I grew up on a block with a million kids my age. Trick-or-treating was my favorite activity of the year. It felt like everything was for and about kids, fun and candy and the whole big world was ours for one night only. I’m happy to say that my kids get to experience that too. There are tons of families on our street, and we trick-or-treat with a big group of neighbors — the bigger kids sprinting for hours and the smaller kids eventually getting carried home.
On top of that fun, our neighbors really understand the assignment. We live in an old neighborhood where the houses are a bit eerie already, and lots of houses really go all out with decor to make the night memorable for the kids (and kids at heart). There are smoke machines, graveyards, giant skeletons, coffins, light-up skull arches, and every kind of Halloween song and sound effect you can imagine. (Toccata and Fugue in D Minor is my favorite.) Five houses down, two families dress up in old diner uniforms and serve hot dogs from their shared driveway.
Like many of you, probably, it made me both sad and thankful last year when Dave reminded those of us raising little kids that this period of life is fleeting. This year, with busy school schedules and our conferences falling in October, my husband and I looked at the calendar at the beginning of the month and realized that there weren’t any good days to do our annual pilgrimage to the pumpkin patch, where we all obsess over each pumpkin’s stem and make sure we go home with at least one Bert and one Ernie. We ended up finding a one-hour window late one Sunday afternoon and snuck it in. But then we were in for another surprise when one kid wanted to recycle last year’s costume, and the other chose a costume just 4 days ago. What is happening?
I hate to admit it, but our years of both kids excitedly skipping from door to door are numbered. And, more broadly, I find myself constantly thinking about how short this time with “little” kids is and feeling so thankful for the stage we’re in — all while I look forward to (hopefully) a little more sleep and a little less laundry in my future.
Anyway, this is all to say, I echo Dave’s encouragement: “If you are still in the mode of celebrating Halloween with your family and neighbors, I encourage you to enjoy those moments while you still can!” The days are long, but the years are short. Happy Halloween!
I’ve been having a lot of conversations recently about how the stewardship landscape is undergoing major shifts, and it seems like shareholder engagement and vote solicitation are going to look very different a few years from now than they looked a few years ago. We’ve covered many of these developments in greater detail here and on The Proxy Season blog, but this ICR blog brings it all together. Here are excerpts on each topic with links to our prior blogs:
The Post-Benchmark Era: According to Reuters reporting, Glass Lewis’ will sunset its “benchmark” or “house-view” voting recommendations by 2027, establishing a clear turning point. Instead of a default recommendation, beginning that year, clients will choose from customizable “perspectives” aligned with their governance philosophies—such as “management-aligned,” “governance fundamentals,” “active owner,” and “sustainability.”
ISS STOXX and the Modular Research Model: ISS STOXX is evolving from a vote recommendation engine to a data and research infrastructure provider. Its new offerings, Gov360 and Custom Lens, support proprietary stewardship programs for institutional investors.
Broadridge: Infrastructure Becomes Policy: Broadridge is expanding beyond proxy voting infrastructure into the policy layer . . . Its institutional platform will now support customizable rule engines, pass-through voting logic, and integrated services across reconciliation, reporting, and disclosure.
But that’s not all! Vanguard, BlackRock and State Street are splitting their proxy voting teams into two separate groups. Voting choice programs have come a long way in a short time. Then there’s the change in the nature of engagement meetings, given the 2025 Schedule 13G eligibility guidance.
The blog says the “combined effect of these developments is eroding the shared ‘benchmark anchor’” and:
– Greater diversity in stewardship frameworks, shaped by regional norms and client mandates.
– Increased operational complexity, as investors reconcile custom logic across platforms.
– New emphasis on stewardship design, based on the sophistication of stewardship design rather than vote recommendation simplicity.
For public companies, that means, “investor communications will need to resonate across multiple customized frameworks, and companies will need strong proxy advice that enables them to translate conviction into customized, data-backed governance decisions.”
If you do not have access to The Proxy Season Blog and all of the other practical guidance that is available here on TheCorporateCounsel.net, I encourage you to email info@ccrcorp.com to sign up today, or sign up online.
Here’s another stewardship update, but this one is more in line with the incremental updates we’re accustomed to seeing annually. Yesterday, ISS Sustainability Solutions, the sustainable investment arm of ISS STOXX, announced updates to its Governance QualityScore for institutional investors. The updates introduce several new factors and extend existing factors to new markets. The major update for the U.S. is the addition of new factors that assess oversight of AI. Based on the detailed new Methodology Highlights (available for download), the new questions are:
Does the board have oversight over artificial intelligence? (Q468)
How many directors have artificial intelligence skills? (Q469)
Does the company have policies and procedures related to artificial intelligence development, deployment, and monitoring? (Q4 70)
Four new questions for the U.S. market also address vesting periods for variable pay plans (CEO vesting period for time-based options, SARs and restricted stock and performance-based options, SARs and restricted stock).
At the same time, ISS announced a data verification period from November 10 to 21 during which companies can verify and submit changes to their data on all factors, new and old, before scores are made available under the updated methodology.
As Zachary shared on PracticalESG.com earlier this week, California’s climate disclosure laws face new legal challenges. ExxonMobil has filed a lawsuit arguing that the laws violate the First Amendment and the National Securities Market Improvement Act. Zachary reminded us that the California Chamber of Commerce has an ongoing lawsuit also challenging the constitutionality of SB 253 and SB 261 under the First Amendment. (First Amendment challenges were successful in lawsuits involving the SEC’s conflict minerals disclosure rules a decade ago.) A differentiator of the new lawsuit is that it also challenges the disclosure requirements as preempted under NSMIA.
As a reminder on the scope of the California laws, the WSJ says:
The rules are specific to California but their oversight reaches businesses across the globe. Under SB 253, companies doing business in the state with an annual total revenue exceeding $1 billion, be they public or private, will have to disclose their greenhouse gas emissions—the ones from their immediate operations, such as electricity intake, and those from their sprawling supply chain. Even if they are based elsewhere in the U.S. or overseas, the rules will apply.
The climate risk reporting rule, SB 261, will affect more companies. It requires public and private firms doing business in California with annual revenue of more than $500 million to disclose climate-related financial risks, along with the measures they are taking to mitigate and adapt to such risks, starting Jan. 1.
At the end of last month, the California Air Resources Board (CARB) posted a preliminary list of companies that it believes fall within the scope of the state’s Climate Corporate Data Accountability Act. The list is not determinative — and CARB is seeking feedback on covered entities through a voluntary survey.
Members of PracticalESG.com can learn more about SB 253 and SB 261. Interested in a full membership with access to the complete range of benefits and resources? Sign up now and take advantage of our no-risk “100-Day Promise” – during the first 100 days as an activated member, you may cancel for any reason and receive a full refund.
